But we can
win it, by leading the development of new industries and manufacturing higher
value goods that the world's consumers demand.

And it is
important that when American companies invent something here, that they make it
here – not all the time, but a healthy
proportion of the time. Because
the fact is that companies learn by doing.

The
manufacturing process itself helps companies develop more efficient ways of doing
things, and even develop second and third-generation product innovations that
would never be discovered on the front end of the design process alone.

That’s why
so many of the Obama administration's economic policies are focused on:

Number one: Creating
incentives for American companies to build more things here; and

Number two: Opening
up global markets so they can sell those things in more places around the
world.

Early on, the
Recovery Act made critical investments in basic infrastructure critical to
manufacturers like roads, bridges and rail lines, as well as in emerging
industries like advanced batteries and smart electric grid technology.

At the
Commerce Department, we’ve been helping U.S. manufacturers become more
efficient and productive through our Hollings Manufacturing Extension
Partnership.

The
Commerce Department has also been addressing one of the most urgent needs of
manufacturers -- fixing a broken patent office that had a 770,000 application
backlog and a three year evaluation time when I arrived.

Under the
leadership of USPTO Director David Kappos, management processes have been
overhauled, and the application backlog has been cut by 10 percent, even as the
volume of applications has increased by seven percent.

Recently,
we announced a fast-track measure that would let applicants have their patents
evaluated within a year for a small fee.

And if the
Senate passes the pending patent reform bill, it will finally give the patent
office the tools it needs to:

Simplify the patent
process;

Reduce unnecessary
litigation; and

Set
its fees so it can hire more examiners and bring its IT system into the 21st century.

Meanwhile,
President Obama has favored tax policies that overwhelmingly benefit those who
make and build things in America.

In the
December tax cut package, there was the provision allowing 100 percent
expensing for all equipment in 2011 -- the largest temporary investment
incentive for manufacturers in U.S.
history.

In his
2012 budget, the president proposes simplifying, expanding, and
making permanent the R&D tax credit.

These
efforts to spur domestic manufacturing have been partnered with an equal focus
on helping our companies compete abroad through the National Export Initiative.

Although
the United States overall is a strong exporter, only one percent of our
companies export and of those that do, 58 percent only sell to one market. We can and must do better.

Manufacturers
are responsible for 68 percent of all U.S. exports, and they've been a
particular focus of our outreach at the International Trade Administration.

We have
been working with the National Association of Manufacturers, as well as FedEx,
UPS and the Postal Service to identify companies well-positioned to take
advantage of new export opportunities.

We’re
pairing these companies up with our trade specialists in 77 countries around
the world whose sole job is to find new customers for Made-in-the-USA goods and
services.

Meanwhile,
my department led 35 trade missions last year – that’s a record.

In fact, I
just returned from India,
where I was helping 24 U.S.
companies capitalize on new opportunities in the wake of the president’s reforms
to how India is treated by U.S. export
control rules.

So, the
Commerce Department and the entire Obama Administration are working hard to
make our manufacturers more innovative at home and competitive abroad.

I know
that sentiment is shared by many people on this committee, as evidenced by your
support of the America COMPETES ACT, which supports the education and
technology investments that are so critical to the future of manufacturing.

And I hope
we can build on that support in Congress to continue strengthening American
manufacturing.